Costa Rica guide
Costa Rica has traditionally been a showcase of human development in Latin America, but has faced increasing difficulties in maintaining its traditional socioeconomic model. Ratification of the controversial Central American Free Trade Agreement is unlikely to silence its critics, especially as the economic downturn begins to bite. Costa Rica is also deeply involved in urgent global endeavours to find a solution to the damaging contribution of deforestation to climate change.
updated February 2009
Poverty in Costa Rica
Costa Rica has advanced rapidly towards the fulfilment of the Millennium Development Goals (MDGs) thanks to long term investment in health and education. Government economic strategies are generally sympathetic to the principle of poverty reduction, acknowledging relevant spending as "priority". The country consequently enjoys some of the highest rankings in the region for life expectancy, infant mortality and other health indicators. Costa Rica is currently positioned at 48 in the UNDP Human Development Index, comfortably ahead of other Central American countries.
Poverty is assessed by reference to two benchmarks. Firstly the national poverty line which is based on the cost of a basket of essential goods, the canasta basica, and, secondly, the extreme poverty line which is the cost of essential food only. In 1990, the baseline year for the MDGs, these indicators stood at 27.4% and 9.1% respectively. In the most recent published survey for the year to March 2007, these had fallen to 16.7% and 3.3%, implying that the 2015 goal of halving poverty will be comfortably achieved.
However, these figures have been prone to sharp swings in both directions in the past. The 2008 rise in food prices together with subsequent economic turmoil may reverse the downward trend. Furthermore, there has been criticism that the contents of the canasta basica have not been reviewed for over 20 years. A government promise to conduct this review may upgrade the poverty line and increase the figures.
It is also recognised that the Goals for primary education and gender equality need greater attention to meet the 2015 deadline. Although the country established mandatory primary education as early as the beginning of the 20th century, the net enrolment rate remains below the target of 100%. Due to the lack of resources, the quality of public education has worsened, thus increasing the inequality in academic achievements between students in public and private schools.
The record in gender equality likewise shows long term improvements alongside some deficiencies. The ratio of girls to boys in all levels of education is at least one to one, and women have steadily increased their participation in political institutions. Nevertheless, unemployment is higher for women and gender wage inequality is still high: women's wages are 20% lower than those of men for the same level of education.
Climate Change in Costa Rica
Costa Rica is a country of exceptionally rich biodiversity, embracing possibly half a million species and a significant range of habitats. Its extensive tropical rainforest, rising in the central mountain range, is renowned for the distinctive ecosystems that are formed within layers of altitude, culminating in the famous cloud forests.
As long term temperatures change, the species within these ecosystem layers move to higher or lower altitudes accordingly. Scientists are concerned that the pace of human-induced climate change will be too fast for this natural process to be stable. Even coffee farmers, who are far more adaptable than natural organisms, are concerned at the impact on their crops which are an important source of export earnings.
Costa Rica is also very exposed to extreme weather events and, with assistance from the World Bank, is strengthening its disaster response systems. The country has been true to its traditional social and environmental values by adopting a creative stance in the fight against climate change. The government has announced an ambitious plan for the country to reduce net emissions to zero by 2021 with 90% of its energy provision scheduled to be renewable. To offset emissions in transport and other sectors, radical schemes of reforestation have been put in place. In 2008 alone, seven million trees were scheduled for planting, said to be the highest per capita rate in the world.
Costa Rica had already acquired a reputation for innovation in countering deforestation. A policy introduced in the 1990s introduced the concept of making payments to compensate landowners for preserving their forests. Although forest cover has been partially restored to over 50%, there are uncertainties over the survival of the highest quality trees. Costa Rica has nevertheless been a leading advocate of payment for "avoided deforestation", a principle which was adopted in the 2008 Poznan Climate Change Conference.
Politics in Costa Rica
Costa Rica’s presidential political system was dominated for much of the 1980s and '90s by consensus within a moderate but nevertheless neoliberal political agenda. This was pursued by the two main parties, the National Liberation Party (Partido de Liberación Nacional- PLN), and the Social-Christian Union Party (Partido Union Socialcristiana - PUSC). In opposition on the left, the Party for Citizens' Action (Partido de Acción Ciudadana, PAC) promotes a deepening of democracy and the reestablishment of Costa Rica's traditional social democratic model. On the right, the Libertarian Movement (Movimiento Libertario) offers uncompromising neoliberalism.
A succession of corruption scandals which tainted no fewer than three former presidents changed Costa Rica’s political landscape. In the Presidential and Congressional elections of February 2006, the PUSC suffered a dramatic meltdown, obtaining only 3.4% of the popular vote. Former president Óscar Arias Sánchez of the PLN was narrowly elected with only 20,000 more votes than Oton Solis from the PAC.
CAFTA and Costa Rica
The outcome of the 2006 elections reflected the divisions in Costa Rica around the Central American Free Trade Agreement (CAFTA), a controversial treaty promoted by the US to 6 Central American countries and the Dominican Republic. Under pressure of a ratification deadline of March 2008 and with all other countries signed up, the new president resorted to a referendum on the issue, a step which none of the other parties had taken.
The bitter debate leading up to the referendum in October 2007 has divided the country. The president, a large segment of the political class, and most domestic and foreign firms favour the agreement, pointing to opportunities presented by the vast US market. The opposition PAC party, trade unions, environmentalists and many academics fear that CAFTA will be the final nail in the coffin of the country's social welfare priorities as state-owned enterprises become available to foreign investors. Tighter discipline over intellectual property rights also creates the spectre of global corporations acquiring control over Costa Rica's unique biodiversity through patent enforcement.
In the event the pro-CAFTA lobby won the referendum by a narrow margin, gaining 51.5% of the votes. The governing PLN party depends on minority support so that the task of passing legislation necessary to honour the agreement encountered fierce opposition in parliament, delaying ratification of CAFTA until January 2009. There is now speculation as to whether the new Obama administration’s commitment to renegotiate the similar North American Free Trade Agreement (NAFTA) might have implications for the future of CAFTA.
The Economy in Costa Rica
The CAFTA controversy should be viewed in the context of Costa Rica’s long term economic development. Between 1950 and 1980, an active welfare state delivered a relatively equal distribution of income and high levels of human development. This was made possible by the increase in social public spending as a percentage of gross domestic product from 8.7% in 1958 to 23.6% in 1980.
Then came the debt crisis of the early 1980s which severely affected Costa Rica. Social spending and real wages decreased substantially during the first half of the decade, and successive governments tried to reduce the role of the state and weaken the influence of public sector workers.
During the 1990s, Costa Rica's economy has experienced significant changes. Tourism together with the attraction of Intel and other foreign high technology firms has allowed the country to become less dependent on coffee and other primary exports. However, businesses operating in the free trade zones have established limited linkages with the rest of the economy, thus contributing little to economic growth and employment creation.
Moreover, the neoliberal reforms have contributed to increasing income inequality and have challenged the long term survival of the traditional, state-centred model of human development in Costa Rica. The issue came to a head again in 2008 as the spiral in world food prices exposed the country’s neglect of domestic food production. An embarrassed government was forced to reverse its dogma of laissez faire in agriculture, hastily announcing technical support for small farmers.
Human Rights and Migration in Costa Rica
Civil and political rights have been fully protected in Costa Rica since the 1950s and Costa Ricans enjoy a free press. Nevertheless, the country still faces serious problems in some areas such as lax protection of union rights, particularly in the free trade zones, sexual exploitation of children, and discrimination against Nicaraguan migrants.
The treatment of Nicaraguan migrants has become a primary concern. Nicaraguans represent an estimated 8% of the total population in a country that is relatively small and has limited resources. While many Nicaraguan migrants benefit from Costa Rican social services, they have suffered from discrimination and racism. The Legislative Assembly, for example, recently passed a controversial immigration law that has been severely criticised for its lack of respect for migrants' rights.
Conflict in Costa Rica
The abolition of the army after the Civil War of 1948 has made Costa Rica unique in Latin America. Demilitarization contributed to the consolidation of democratic institutions and also freed resources to invest in health and education. This tradition emboldened President Óscar Arias Sánchez to deliver a powerful rebuke at the 2008 UN General Assembly. He told richer countries that “excessive military spending” was impeding progress towards the MDGs.
Costa Rica has a tortuous relationship with Nicaragua thanks to a long term conflict over navigation rights on the San Juan River, which forms part of the border between the two countries. In the last few years the conflict has escalated due to Nicaraguan opposition to Costa Rican police navigating the river. In September 2005, the Costa Rican government brought the case to the International Court of Justice> in The Hague and the Nicaraguan government responded with threats to increase tariffs. Submissions to the Court are due to be heard during 2009.
The OneWorld Costa Rica Guide was first published in December 2005 with a text written by Volunteer Editors Rosa Arias-Yague and Diego Sánchez-Ancochea.
|
| Banana industry, Costa Rica © Gandhiji |
Poverty is assessed by reference to two benchmarks. Firstly the national poverty line which is based on the cost of a basket of essential goods, the canasta basica, and, secondly, the extreme poverty line which is the cost of essential food only. In 1990, the baseline year for the MDGs, these indicators stood at 27.4% and 9.1% respectively. In the most recent published survey for the year to March 2007, these had fallen to 16.7% and 3.3%, implying that the 2015 goal of halving poverty will be comfortably achieved.
However, these figures have been prone to sharp swings in both directions in the past. The 2008 rise in food prices together with subsequent economic turmoil may reverse the downward trend. Furthermore, there has been criticism that the contents of the canasta basica have not been reviewed for over 20 years. A government promise to conduct this review may upgrade the poverty line and increase the figures.
It is also recognised that the Goals for primary education and gender equality need greater attention to meet the 2015 deadline. Although the country established mandatory primary education as early as the beginning of the 20th century, the net enrolment rate remains below the target of 100%. Due to the lack of resources, the quality of public education has worsened, thus increasing the inequality in academic achievements between students in public and private schools.
|
| Tecnoclub, Costa Rica © Maartje Op de Coul |
Climate Change in Costa Rica
|
| Irazu Volcano, Costa Rica © Rosa Arias-Yague |
As long term temperatures change, the species within these ecosystem layers move to higher or lower altitudes accordingly. Scientists are concerned that the pace of human-induced climate change will be too fast for this natural process to be stable. Even coffee farmers, who are far more adaptable than natural organisms, are concerned at the impact on their crops which are an important source of export earnings.
Costa Rica is also very exposed to extreme weather events and, with assistance from the World Bank, is strengthening its disaster response systems. The country has been true to its traditional social and environmental values by adopting a creative stance in the fight against climate change. The government has announced an ambitious plan for the country to reduce net emissions to zero by 2021 with 90% of its energy provision scheduled to be renewable. To offset emissions in transport and other sectors, radical schemes of reforestation have been put in place. In 2008 alone, seven million trees were scheduled for planting, said to be the highest per capita rate in the world.
Costa Rica had already acquired a reputation for innovation in countering deforestation. A policy introduced in the 1990s introduced the concept of making payments to compensate landowners for preserving their forests. Although forest cover has been partially restored to over 50%, there are uncertainties over the survival of the highest quality trees. Costa Rica has nevertheless been a leading advocate of payment for "avoided deforestation", a principle which was adopted in the 2008 Poznan Climate Change Conference.
Politics in Costa Rica
|
| Protestas en costa rica © Erika Valverde / UnMundo América Latina |
A succession of corruption scandals which tainted no fewer than three former presidents changed Costa Rica’s political landscape. In the Presidential and Congressional elections of February 2006, the PUSC suffered a dramatic meltdown, obtaining only 3.4% of the popular vote. Former president Óscar Arias Sánchez of the PLN was narrowly elected with only 20,000 more votes than Oton Solis from the PAC.
CAFTA and Costa Rica
|
| CAFTA protests in Costa Rica © José Pablo Molina |
The bitter debate leading up to the referendum in October 2007 has divided the country. The president, a large segment of the political class, and most domestic and foreign firms favour the agreement, pointing to opportunities presented by the vast US market. The opposition PAC party, trade unions, environmentalists and many academics fear that CAFTA will be the final nail in the coffin of the country's social welfare priorities as state-owned enterprises become available to foreign investors. Tighter discipline over intellectual property rights also creates the spectre of global corporations acquiring control over Costa Rica's unique biodiversity through patent enforcement.
In the event the pro-CAFTA lobby won the referendum by a narrow margin, gaining 51.5% of the votes. The governing PLN party depends on minority support so that the task of passing legislation necessary to honour the agreement encountered fierce opposition in parliament, delaying ratification of CAFTA until January 2009. There is now speculation as to whether the new Obama administration’s commitment to renegotiate the similar North American Free Trade Agreement (NAFTA) might have implications for the future of CAFTA.
The Economy in Costa Rica
The CAFTA controversy should be viewed in the context of Costa Rica’s long term economic development. Between 1950 and 1980, an active welfare state delivered a relatively equal distribution of income and high levels of human development. This was made possible by the increase in social public spending as a percentage of gross domestic product from 8.7% in 1958 to 23.6% in 1980.
Then came the debt crisis of the early 1980s which severely affected Costa Rica. Social spending and real wages decreased substantially during the first half of the decade, and successive governments tried to reduce the role of the state and weaken the influence of public sector workers.
|
| Manuel Antonio, Costa Rica © Rosa Arias-Yague |
Moreover, the neoliberal reforms have contributed to increasing income inequality and have challenged the long term survival of the traditional, state-centred model of human development in Costa Rica. The issue came to a head again in 2008 as the spiral in world food prices exposed the country’s neglect of domestic food production. An embarrassed government was forced to reverse its dogma of laissez faire in agriculture, hastily announcing technical support for small farmers.
Human Rights and Migration in Costa Rica
Civil and political rights have been fully protected in Costa Rica since the 1950s and Costa Ricans enjoy a free press. Nevertheless, the country still faces serious problems in some areas such as lax protection of union rights, particularly in the free trade zones, sexual exploitation of children, and discrimination against Nicaraguan migrants.
The treatment of Nicaraguan migrants has become a primary concern. Nicaraguans represent an estimated 8% of the total population in a country that is relatively small and has limited resources. While many Nicaraguan migrants benefit from Costa Rican social services, they have suffered from discrimination and racism. The Legislative Assembly, for example, recently passed a controversial immigration law that has been severely criticised for its lack of respect for migrants' rights.
Conflict in Costa Rica
The abolition of the army after the Civil War of 1948 has made Costa Rica unique in Latin America. Demilitarization contributed to the consolidation of democratic institutions and also freed resources to invest in health and education. This tradition emboldened President Óscar Arias Sánchez to deliver a powerful rebuke at the 2008 UN General Assembly. He told richer countries that “excessive military spending” was impeding progress towards the MDGs.
Costa Rica has a tortuous relationship with Nicaragua thanks to a long term conflict over navigation rights on the San Juan River, which forms part of the border between the two countries. In the last few years the conflict has escalated due to Nicaraguan opposition to Costa Rican police navigating the river. In September 2005, the Costa Rican government brought the case to the International Court of Justice> in The Hague and the Nicaraguan government responded with threats to increase tariffs. Submissions to the Court are due to be heard during 2009.
The OneWorld Costa Rica Guide was first published in December 2005 with a text written by Volunteer Editors Rosa Arias-Yague and Diego Sánchez-Ancochea.
»
Your right of reply
Does this OneWorld Guide contain any inaccuracies?
Has something important been omitted?
Your views are welcome
»
Please write to the Guides Editor Has something important been omitted?
Your views are welcome
Help us to include all developing countries
Many countries are missing from our range of Country Briefings. OneWorld wants to fill these gaps as part of our efforts to improve understanding of the issues faced by developing countries. We receive no funding for the production of our educational resources. Every small contribution helps!
Many countries are missing from our range of Country Briefings. OneWorld wants to fill these gaps as part of our efforts to improve understanding of the issues faced by developing countries. We receive no funding for the production of our educational resources. Every small contribution helps!
|
Printable version
top of the page